PLANS leaked to a Welsh Labour Euro-MP suggest that Wales could be in line for a substantial safety net from Europe after its Objective One programme ends in 2006.

Eluned Morgan has been given details of the new regional aid regime due to be announced by the European Commission this month.

There have been serious concerns that Wales will lose out in future because 10 relatively poor countries from Eastern Europe and the Mediterranean are joining the EU in May.

But after meetings with EC officials including Budget Commissioner Michaele Schreyer, Mrs Morgan was optimistic.

She revealed that once the EU expands to 25 members Objective One will be scrapped and replaced by a new block of money known as the Convergence Fund.

This will have the same objective as Objective One - to improve economic performance and consequently increase wealth in the EU's poorest regions - but will be split into two categories.

The first will be for those regions whose GDP is less than 75% of the expanded EU25 and the other for those whose GDP is less than 75% of the current EU15. Wales will almost certainly qualify for the latter, to be known as "the statistical effect".

There appears to be a dispute in the Commission over what level of funding "statistical effect" regions should receive. Regional Commissioner Michel Barnier wants payments to start at 80% of Objective One levels and taper off, while his colleague Mrs Schreyer wants it to start at a lower rate which is maintained throughout the programme.

Another area of disagreement stems from different views over the proportion of member state budgets that should be passed to the EU. Six countries, including the UK, want EU spending to be restricted to 1% of GDP while the Commission wants spending to rise to 1.24%.

Mrs Morgan said, "When the new member states join the EU, they will obviously need significant economic support, but my concern is that this should not be to the detriment of Wales.

"It is only now that the Objective One funding is beginning to bite, and it would be a tragedy if the economic momentum which has developed came to a sudden halt."

Mrs Morgan also questioned the capacity of the new member states to absorb large amounts of money with adequate controls, and expressed her desire for the Commission to keep a careful watch on how this money is spent.

In her meeting with Mrs Schreyer, Mrs Morgan said she discovered that the package proposed was looking good for Wales although this will have to be agreed by the governments of the EU and the European Parliament.

Mrs Morgan said she agreed with the Commissioner that regions should be eventually eased off a dependency on EU funds, but stressed that areas such as Wales still require support to develop a degree of long-term stability.